Analyst: Apple traded 1.5 million iPhone holiday sales to establish iPod touch

“Apple knowingly gave up as many as 1.5 million iPhone sales during the holiday quarter to establish the future of the iPod as a mobile device, according to investment note issued on Monday by Needham & Co.,” Aidan Malley reports for AppleInsider.

“Analyst Charlie Wolf bases his observations around statements made by Apple chief operating officer Tim Cook during the iPod maker’s latest quarterly results conference call; the executive referred to the iPod touch as becoming a ‘mainstream Wi-Fi mobile platform’ rather than just a touchscreen version of the iPod. The company’s willingness to reduce the feature and price gaps between the iPhone and iPod touch indicates that it’s ready to trade short-term losses for long-term growth of the iPod as a general device, especially among existing iPod owners trading up from older players,” Malley reports.

“The increased support for the iPod touch may also be a calculated risk that future iPhone updates will negate any immediate hits to the current product’s success. Needham predicts that Apple will release an upgraded, 3G-capable iPhone at the same price in the summer and will drop the price of the current model to $299 at the same time, also dumping current iPod touch prices to $199 and $299,” Malley reports.

Full article here.

During the company’s conference call, Apple executives, stated at least three separate times that, to paraphrase, “Apple established iPod touch which has the potential to become the very first mainstream mobile platform running all kinds of applications.”

29 Comments

  1. My iPhone is a great phone, but had they had the iPod Touch available last June when they intro’d the iPhone, I would have probably opted for the iPod Touch. It’s going to be a killer device.

  2. To suggest that a consumer decision was between an iPhone, which entails a subscription and solves a completely different need, with an iPod touch is complete, utter bullshit.

    These guys do not know what the fsck they are talking about.

  3. There are a lot of people that I talk to that want an iPhone but don’t want to give their business to AT&T;(yest they hate them that much!). The iPod touch is no doubt the future of a lot of great things. Who knows maybe Apple will start streaming a weekly show to iPod touch that features new artist samples?

  4. @Spark

    Exactly. Apple didn’t trade a flippin’ thing, ‘cos like millions of others, I don’t need a new phone.
    My company pays my phone bill (just as long as it’s from an “other, but unnamed” company), so I wouldn’t have bought an iPhone anyway.

  5. The Touch is showing the direction Apple is taking. They are smart as hell, doing things slowly but meaningfully:

    1) First they’ve launched the Touch and made sure people will get on board. It’s somekind of proof of concept.

    2) Make it a platform with a couple of application added on it. + many more to come with the SDK. People are still there.

    3) Then in the future, launch a similar but a bit larger device, + a couple of productivity application and finally, you have the Mac Touch Tablet to come.

    Conclusion:

    The Mac Touch or iTablet is the surprise of 2008. Released after the SDK.

    It will be an extended Touch. Not like any other tablet be totally rethought, the same way iPhone reshaped the phone business. As a device needs to address the right issues, it won’t be a laptop. That’s the common mistake Microsoft, Dell, HP are always making…

    It won’t be for people to do desktop work on, of course. It will rather be a MEDIA device, + the ability to take note + multi-touch + iWork application fully adapted to it.

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